Canton Strategic Holdings (NASDAQ: CNTN) posts first Canton Network revenue amid sizable Q2 2026 loss

Rhea-AI Filing Summary

Canton Strategic Holdings reported its first operating revenue for the quarter ended June 30, 2026 as it pivots to blockchain-based activities on the Canton Network. Total revenue was $1.50 million, including $1.30 million from its locking-as-a-service offering and $191,226 of network validation revenue from Super Validator operations, establishing a recurring operating base tied to Canton Coin activity.

Results remained deeply loss-making. Net loss from continuing operations for the quarter was $17.95 million, and total net loss was $19.25 million, largely driven by an unrealized loss on digital asset holdings of $23.74 million. For the first half of 2026, net loss reached $66.60 million, including $38.75 million of unrealized digital asset losses and $32.33 million of stock-based compensation, much of it related to a November 2025 PIPE. On a non-GAAP basis, Adjusted EBITDA for the quarter was a loss of $0.82 million and Adjusted Operating Expenses were $2.63 million, yielding an Adjusted Operating Expenses coverage ratio of 56.9%.

The balance sheet is dominated by digital assets of $523.35 million and cash and cash equivalents of $37.24 million as of June 30, 2026, funded by $91.25 million of net cash from equity financing in the first half. The company also detailed a Super Validator weight program that could increase active network weight from 0.5 to 15 by early 2028, contingent on meeting Canton Improvement Proposal milestones and maintaining required Canton Coin balances.

Positive

• $1.50 million in Q2 revenue marks the company’s first operating revenue, including $1.30 million from its locking-as-a-service offering and $191,226 from Super Validator operations.
• Liquidity improved, with cash and cash equivalents rising to $37.24 million at June 30, 2026, supported by $91.25 million of net cash from equity financing in the first half.
• Non-GAAP performance shows more moderate core expense levels, with Q2 Adjusted Operating Expenses of $2.63 million and Adjusted EBITDA loss of $0.82 million compared with much larger GAAP losses.

Negative

• Q2 net loss from continuing operations was $17.95 million and total net loss was $19.25 million, driven largely by digital asset volatility.
• For the first half of 2026, net loss totaled $66.60 million, including a substantial $38.75 million unrealized loss on digital asset holdings, highlighting significant exposure to Canton Coin price movements.
• Stock-based compensation totaled $32.33 million for the first half, heavily inflating GAAP operating expenses to $37.92 million and diluting the connection between reported losses and cash operating performance.

Filing Explained

The completed Gravitas sale narrows the reported business perimeter, while LaaS uses company-owned Canton Coin without transferring title.

Canton Strategic Holdings reports that it completed the sale of legacy biotechnology subsidiary Gravitas Life Sciences, LLC; the business is consequently presented in the release as discontinued operations rather than part of the continuing operating business.

The release does not disclose the sale’s consideration or proceeds, so its direct economic size cannot be established from this filing.

Under the locking-as-a-service offering, the company locks its own Canton Coin for customers that must maintain locked balances, while retaining legal and beneficial ownership; the arrangement therefore supports the customers’ requirement without transferring title to the coins.

As of June 30, 2026, cash and equivalents of $37,241,568 equals 1,497.4 days of the last reported quarter’s operating cash use, based on operating cash flow of $2,238,304.

Sources and calculations

• Canton Strategic Holdings Form 8-K and Exhibit 99.1 (2026-08-14)
• Form 8-K purpose (2026-07-17)
• Canton Strategic Holdings latest quarterly fundamentals (2026Q2)

• Cash and equivalents vs quarterly operating cash outflow, in days of cash use $37,241,568 / ($2,238,304 / 90) = [object Object]

8-K Event Classification

2 items: 2.02, 9.01

2 items

Item 2.02 Results of Operations and Financial Condition Financial

Disclosure of earnings results, typically an earnings press release or preliminary financials.

Item 9.01 Financial Statements and Exhibits Exhibits

Financial statements, pro forma financial information, and exhibit attachments filed with this report.

Key Figures

Q2 2026 Total Revenue: $1,495,859 Q2 2026 Net Loss: $19,254,826 Unrealized Loss on Digital Assets: $23,735,950 +5 more

8 metrics

Q2 2026 Total Revenue $1,495,859 Three months ended June 30, 2026

Q2 2026 Net Loss $19,254,826 Includes continuing and discontinued operations

Unrealized Loss on Digital Assets $23,735,950 Three months ended June 30, 2026

Digital Assets Balance $523,353,752 As of June 30, 2026 on balance sheet

Cash and Cash Equivalents $37,241,568 As of June 30, 2026, continuing operations

Adjusted EBITDA Q2 2026 $(820,449) Non-GAAP metric for three months ended June 30, 2026

Adjusted Operating Expenses Q2 2026 $2,628,156 Operating expenses minus stock-based compensation

Approved Super Validator Weight 15 Total approved SV weight as of June 30, 2026

Key Terms

locking-as-a-service, Super Validator, Canton Improvement Proposals, Adjusted EBITDA, +2 more

6 terms

locking-as-a-service technical

"its locking-as-a-service (“LaaS”) offering on the Canton Network"

A paid, cloud-delivered service that manages and enforces locks on assets, accounts, devices, or digital keys on behalf of customers. Think of it like hiring a building manager who controls who can open which doors and when—only applied to software keys, access controls, token vesting, or physical locks via connected hardware. Investors care because it turns a technical security function into a recurring revenue business and can affect a company’s operational risk and compliance profile.

Super Validator technical

"The Company operates as a Super Validator (“SV”) on the Canton Network"

A super validator is an entity or operator in a proof‑of‑stake cryptocurrency network that has been selected or earned the right to check and confirm transactions and create new blocks more often than ordinary validators. Think of it like a trusted traffic controller for a digital ledger: its reliability and influence affect how quickly and securely the network runs, how rewards are distributed, and how decision‑making power is concentrated—factors investors watch for risk, return and governance implications.

Canton Improvement Proposals technical

"under Canton Improvement Proposals (“CIP”) 0105 and CIP-0116 to maintain locked CC"

Adjusted EBITDA financial

"The Company defines Adjusted EBITDA as net income (loss), excluding income tax"

Adjusted EBITDA is a way companies measure how much money they make from their core operations, like running a business, by removing certain costs or income that aren’t part of regular business activities. It helps investors see how well a company is doing without distractions from unusual expenses or gains, making it easier to compare companies or track performance over time.

Adjusted Operating Expenses Coverage Ratio financial

"Adjusted Operating Expenses Coverage Ratio is calculated as Adjusted Operating Expenses divided"

unrealized loss from digital assets holdings financial

"Unrealized loss from digital assets holdings | | | (23,735,950"

Earnings Snapshot

Q2 2026 Revenue: $1,495,859

Three and six months ended June 30, 2026

Q2 2026 Revenue $1,495,859

Q2 2026 Net Loss $19,254,826

Six-Month 2026 Net Loss $66,598,023

Q2 2026 Adjusted EBITDA $(820,449)

Q2 2026 Adjusted Operating Expenses $2,628,156

FAQ

How much revenue did Canton Strategic Holdings (CNTN) generate in Q2 2026?

Canton Strategic generated $1,495,859 in total revenue for Q2 2026. This included $1,304,633 from its locking-as-a-service offering and $191,226 of network validation revenue from Super Validator operations on the Canton Network.

What was Canton Strategic Holdings’ (CNTN) net loss for Q2 2026?

The company reported a Q2 2026 net loss of $19,254,826. This included a net loss from continuing operations of $17,954,081 and was heavily influenced by an $23,735,950 unrealized loss on digital asset holdings linked to Canton Coin.

What non-GAAP metrics did Canton Strategic Holdings (CNTN) report for Q2 2026?

Canton Strategic reported Q2 2026 Adjusted EBITDA of $(820,449) and Adjusted Operating Expenses of $2,628,156. The Adjusted Operating Expenses coverage ratio was 56.9%, calculated as Adjusted Operating Expenses divided by total revenues for the quarter.

How large are Canton Strategic Holdings’ (CNTN) digital asset holdings?

As of June 30, 2026, the company held $523,353,752 in digital assets. These holdings, primarily related to Canton Coin, dominate its total assets of $564,570,386 and expose results to significant unrealized gains or losses each period.

What is the cash position of Canton Strategic Holdings (CNTN) after recent financing?

Cash and cash equivalents were $37,241,568 at June 30, 2026. During the first half of 2026, the company raised $91,245,141 of net cash from equity financings, offsetting $9,873,492 used in operating activities and $60,586,023 used to purchase digital assets.

How is Canton Strategic Holdings (CNTN) expected to grow Super Validator rewards?

The company has total approved Super Validator weight of 15, with 0.5 active as of June 30, 2026. If milestones under CIPs 0102 and 0114 are met, active weight could increase to 15 by Q1 2028, potentially expanding Canton Coin reward generation.

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Understanding 8-K Material Events →

Available on EDGAR 08/14/2026 - 05:16 PM Accepted by SEC EDGAR 08/14/2026 - 05:15 PM Learn about SEC filing dates

false 0001861657 0001861657 2026-08-14 2026-08-14 iso4217:USD xbrli:shares iso4217:USD xbrli:shares

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

Date of Report (Date of earliest event reported) August 14, 2026

CANTON STRATEGIC HOLDINGS, INC.

(Exact name of registrant as specified in its charter)

Delaware		001-41210		84-2642541
(State or other jurisdiction of incorporation)		(Commission File Number)		(I. R. S. Employer Identification No.)

1460 Broadway, New York, NY

00000

(Address of principal executive offices, including zip code)

(212) 210-6006

(Registrant’s telephone number, including area code)

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class		Trading Symbol(s)		Name of each exchange on which registered
Common stock, $0.0001 par value		CNTN		The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Item 2.02 Results of Operations and Financial Condition.

On August 14, 2026, Canton Strategic Holdings, Inc. (the “Company”) issued a press release announcing its financial and operating results for the second quarter ended June 30, 2026. A copy of the press release is furnished as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated herein by reference.

The information in this Item 2.02, including Exhibit 99.1 attached hereto, is being furnished and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as expressly set forth by specific reference in such a filing.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits.

Exhibit No.		Description of Exhibit
99.1		Press Release, dated August 14, 2026
104		The cover page from this Current Report on Form 8-K, formatted in Inline XBRL.

-2-

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Date: August 14, 2026	Canton Strategic Holdings, Inc.
	/s/ Mark Wendland
	Mark Wendland
	Chief Executive Officer

-3-

Exhibit 99.1

Canton Strategic Holdings, Inc. Releases Second Quarter 2026 Financial and Operational Results

Records first operating revenue from locking service and Super Validator operations

Completes sale of legacy biotechnology subsidiary Gravitas

NEW YORK, August 14, 2026 — Canton Strategic Holdings, Inc. (Nasdaq: CNTN) (“Canton Strategic” or the “Company”), the first publicly traded company to leverage Canton Coin (“CC”) to support the Canton Network’s ability to digitize traditional financial markets, today released financial and operating results for the second quarter ended June 30, 2026.

“We are pleased to see our disciplined strategy and operational focus pay off with meaningful operating revenue recognized in the second quarter,” said Mark Wendland, Chairman and Chief Executive Officer of Canton Strategic Holdings. “Since launching our strategy in November 2025, we have taken a diversified approach to value accretion, seeking opportunities to capitalize on commercial ventures that align with our long-term conviction in the Canton Network’s ability to transform financial markets.”

During the quarter, the Company recorded its first operating revenue, reflecting the initial contribution from its Super Validator operations and its locking-as-a-service (“LaaS”) offering on the Canton Network, establishing the Company’s base of revenue generating business operations. Notably, its LaaS offering drove revenue of approximately $1.3 million (see “Other Revenue” in financial tables below). This offering, launched in April 2026, supports Super Validators and Featured Applications who are required under Canton Improvement Proposals (“CIP”) 0105 and CIP-0116 to maintain locked CC balances. Through this service, the Company locks its own CC on a customer’s behalf while retaining legal and beneficial ownership, and is compensated through a stated interest rate, a share of the customer’s network rewards, or an equity grant earned over the contract term, depending on the arrangement.

Separately, the Company’s Validator and Super Validator operations drove $191,226 in revenue during this quarter, representing CC rewards earned for providing validation and liveness services to the network.

“Our Super Validator and locking-as-a-service operations reflect the active role we intend to play as the network scales, supporting the builders and validators driving institutional adoption of blockchain infrastructure,” continued Wendland. “Our growing operating business, alongside our Canton Coin treasury, gives shareholders a differentiated way to gain exposure to the network’s adoption, rather than passive exposure to a single token.”

Quarterly Highlights (as of June 30, 2026)

● Secured approval for an expanded Super Validator weight of 15 under CIP-0102 and CIP-0114. Active minting at 0.5 weight began in May 2026, with the remaining 14.5 weight scheduled to unlock in tranches through the first quarter of 2028 as the Company meets specific deliverables and receives approval from the Canton Foundation’s Accountability Committee. Importantly, a higher weight indicates a proportionally larger claim on the CC minted to Super Validators.

● Launched its first commercial offering, locking-as-a-service (“LaaS”), to Canton Network Super Validators and Featured Applications. This model compensates the Company via a daily interest rate on locked CC, a share of network rewards, or an equity grant earned over a one-year term.

● Recognized revenue through diversified income streams, including $1,304,633 largely from its LaaS program, as well as $191,226 from its Network validation activities, for the three months ended June 30, 2026, the Company’s first quarter generating revenue under its digital asset treasury strategy.

● Streamlined its operations through the sale of Gravitas Life Sciences, Inc. (“Gravitas”), the Company’s legacy clinical-stage biotechnology subsidiary, on July 17, 2026, in exchange for an unsecured promissory note in the original principal amount of $3,500,000 bearing 15% payment-in-kind interest, plus contingent development milestone payments.

● Strengthened its governance through the election of Sean Galvin, Pamela L. Carter, and Rishi Nangalia as directors at the Company’s 2026 annual meeting on July 13, 2026. Mr. Galvin, Ms. Carter, and Mr. Nangalia collectively bring deep experience across financial markets, public company oversight, and technology to the Company’s Board.

● Created optionality for opportunistic share repurchases through Board approval of a $50 million share repurchase program on June 11, 2026; no shares were repurchased under the program during the period.

● Canton Coin holdings of 3,714,204,876 units with a fair value of $523,353,752, up from $501,760,369 as of December 31, 2025

● Cost basis of CC holdings of $584,064,579 as of June 30, 2026, compared to $523,770,731 as of December 31, 2025

● Cash and cash equivalents of $37,241,568 as of June 30, 2026, up from $12,007,148 as of December 31, 2025.

Financial Highlights (Three Months Ended June 30, 2026)

● Total revenue of $1,495,859 for the three months ended June 30, 2026, compared to $0 for the same period in 2025.

● Adjusted EBITDA of ($820,449) for the three months ended June 30, 2026 compared to ($1,126,984) for the same period in 2025.

● Adjusted Operating Expenses of $2,628,156, compared to $1,122,991 in the same period in 2025.

● Adjusted Operating Expenses Coverage Ratio of 56.9%, compared to 0.0% in the same period in 2025, reflecting the first recognized revenue in the current period.

● Net loss of $19,254,826, or $(0.08) per basic and diluted share from continuing operations, for the three months ended June 30, 2026.

● Unrealized loss on digital asset holdings of $23,735,950 for the three months ended June 30, 2026, reflecting a decline in the reference price of CC relative to the Company’s weighted-average cost basis; the Company held no digital assets prior to November 2025.

● Total assets of $564,570,386 and total stockholders’ equity of $454,902,612 as of June 30, 2026, compared to total assets of $519,146,435 and total stockholders’ equity of $397,925,880 at December 31, 2025.

Business Update

Super Validator Operations

The Company operates as a Super Validator (“SV”) on the Canton Network. SVs earn Canton Coin based on their approved “weight,” which functions like a share count: a higher weight means a proportionally larger claim on the CC minted to Super Validators in each network round. Weight unlocks in tranches as the Company meets specific deliverables and receives approval from the Canton Foundation’s Accountability Committee. Each unlock triggers ongoing per-round minting plus a one-time catch-up mint of rewards that had accumulated in escrow while that weight awaited approval.

Active minting began on May 9, 2026, when the Company met the first of eight deliverables under CIP-0102. For the period from that date through June 30, 2026, the Company recognized Network validation revenue of $191,226 on its active 0.5 weight, its first revenue from Super Validator operations, which included a one-time catch-up mint of rewards accumulated in escrow since January 21, 2026, when CIP-0102 was approved. As of June 30, 2026, the Company held total approved SV weight of 15 (4 under CIP-0102, 11 under CIP-0114) and an active weight of 0.5. The remaining 14.5 is expected to unlock through the first quarter of 2028 as follows:

		Three Months Ended
		2026												2027																2028
		30-Jun				30-Sep				31-Dec				31-Mar				30-Jun				30-Sep				31-Dec				31-Mar
CIP 102(1)
Active weight(2)			0.5
Additional weight							0.5				0.5				0.5				0.5				0.5				0.5				0.5
Total CIP 102 weight			0.5				1.0				1.5				2.0				2.5				3.0				3.5				4.0
CIP 114(3)
Additional weight							5.5				1.375				1.375				1.375				1.375				-				-
Total CIP 114 weight			0.0				5.5				6.875				8.25				9.625				11				11				11
Total SV weight			0.5				6.5				8.375				10.25				12.125				14.0				14.5				15.0

	(1)	Under CIP 102, the Company may earn 0.5 SV weight for each quarterly milestone period, consisting of (i) 0.25 SV weight for publishing a quarterly Canton ecosystem research report addressing, among other matters, on-chain analytics, community developments, governance and tokenomics, planned technology updates and dashboard statistics, and (ii) 0.25 SV weight for conducting an open-to-the-public webinar of at least 45 minutes addressing substantially similar topics. The remaining 3.5 SV weight reflected above therefore represents seven quarterly milestone periods.
	(2)	For the three months ended June 30, 2026, the Company earned 1,253,679 CC in rewards associated with the active CIP 102 0.5 SV weight, which is was recognized as Network validation rewards of $191,226.
	(3)	Under CIP 114, the Company’s allocated SV weight is subject to quarterly review and a continuing requirement that the Company maintain CC holdings at or above the applicable CC Quantum established under the program. Assuming that requirement continues to be satisfied, 50% of the applicable allocated weight becomes eligible for release following the first quarterly review, and one-fourth of the remaining 50% becomes eligible for release at each of the next four quarterly reviews.

If achieved on schedule, active weight would grow thirty-fold, from 0.5 to the full 15, by the first quarter of 2028.

Under CIP-0114, the Company’s allocated SV weight is subject to quarterly review and a continuing requirement that the Company maintain CC holdings at or above the applicable CC Quantum established under the program. Assuming that requirement continues to be satisfied, 50% of the applicable allocated weight becomes eligible for release following the first quarterly review, and one-fourth of the remaining 50% becomes eligible for release at each of the next four quarterly reviews.

Locking-as-a-Service

Canton Network rules (CIP-0105 for Super Validators, CIP-0116 for Featured Applications) require those participants to keep a minimum amount of CC locked to maintain their status and reward eligibility. Through its LaaS offering, the Company locks its own CC on a customer’s behalf so the customer can satisfy that requirement without sourcing CC itself. The Company retains full ownership of the CC throughout; only a wallet identifier, not custody or title, is shared with the Canton Foundation for compliance verification. LaaS launched on April 23, 2026.

CANTON STRATEGIC HOLDINGS, INC.

CONSOLIDATED BALANCE SHEETS (Unaudited)

		June 30, 2026				December 31, 2025
ASSETS
Current assets
Cash and cash equivalents		$	37,241,568			$	12,007,148
Prepaid expenses and other current assets			3,274,069				197,383
Current assets held for sale			700,997				5,181,535
Total current assets			41,216,634				17,386,066
Digital assets			523,353,752				501,760,369
Total assets		$	564,570,386			$	519,146,435
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable		$	916,244			$	521,201
Accrued expenses			983,715				506,460
Current liabilities held for sale			726,039				2,258,703
Total current liabilities			2,625,998				3,286,364
Other liabilities
Deferred tax liability			107,041,776				117,934,191
Total liabilities			109,667,774				121,220,555
Commitments and contingencies (see Note 8)
Stockholders' equity
Preferred stock, $0.0001 par value, 10,000,000 shares authorized, no shares  issued and outstanding as of December 31, 2025 and December 31, 2024			-				-
Common stock, $0.0001 par value, 1,000,000,000 shares and 250,000,000 shares authorized, 37,112,466 shares  and 1,973,999 shares issued and 37,112,220 shares and 1,973,753 shares outstanding  as of December 31, 2025 and December 31, 2024, respectively			7,727				3,711
Additional paid-in capital			594,380,217				470,809,478
Accumulated deficit			(139,415,367	)			(72,817,344	)
Treasury stock, at cost, 246 shares held in treasury as of December 31, 2025 and December 31, 2024			(69,965	)			(69,965	)
Total stockholders' equity			454,902,612				397,925,880
Total liabilities and stockholders' equity		$	564,570,386			$	519,146,435

CANTON STRATEGIC HOLDINGS, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited)

		For the Three Months Ended June 30,								For the Six Months Ended June 30,
		2026				2025				2026				2025
Revenue
Network validation revenue		$	191,226			$	-			$	191,226			$	-
Other revenue			1,304,633				-				1,304,633				-
Total revenue			1,495,859				-				1,495,859				-
Operating expenses
Research and development			-				123,638				-				215,087
General and administrative			2,698,013				1,304,956				37,919,194				3,257,555
Total operating expenses			2,698,013				1,428,594				37,919,194				3,472,642
Loss from operations			(1,202,154	)			(1,428,594	)			(36,423,335	)			(3,472,642	)
Other income (expense)
Interest expense			-				(6,161	)			-				(14,632	)
Interest income			311,848				2,168				630,026				15,604
Unrealized loss from digital assets holdings			(23,735,950	)			-				(38,749,254	)			-
Total other income (expense), net			(23,424,102	)			(3,993	)			(38,119,228	)			972
Total loss before income taxes			(24,626,256	)			(1,432,587	)			(74,542,563	)			(3,471,670	)
Provision (benefit) for income taxes			(6,672,175	)			-				(10,892,415	)			-
Net loss from continuing operations			(17,954,081	)			(1,432,587	)			(63,650,148	)			(3,471,670	)
Net loss from discontinued operations			(1,300,745	)			(422,566	)			(2,947,875	)			(925,187	)
Net loss		$	(19,254,826	)		$	(1,855,153	)		$	(66,598,023	)		$	(4,396,857	)
Net loss per share:
Continuing operations - basic and diluted		$	(0.08	)		$	(0.50	)		$	(0.30	)		$	(1.27	)
Discontinued operations - basic and diluted		$	(0.01	)		$	(0.15	)		$	(0.01	)		$	(0.34	)
Weighted average number of common shares outstanding:
Basic and diluted			216,864,938				2,877,327				212,310,722				2,725,863

CANTON STRATEGIC HOLDINGS, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited)

		For the Six Months Ended June 30,
		2026				2025
Cash flows from operating activities:
Net loss		$	(66,598,023	)		$	(4,396,857	)
Net loss from discontinued operations			(2,947,875	)			(925,187	)
Net loss from continuing operations			(63,650,148	)			(3,471,670	)
Adjustments to reconcile net loss to net cash used in operating activities:
Non-cash revenue from network validation and services			(1,515,630	)			-
Unrealized loss from digital assets holdings			38,749,254				-
Deferred tax expense/(benefit)			(10,892,415	)			-
Stock based compensation			32,329,614				430,917
Increase in operating assets:
Prepaid expenses and other current assets			(764,031	)			(150,755	)
Increase (decrease) in operating liabilities:
Accounts payable			(158,596	)			329,453
Accrued expenses			477,255				(225,964	)
Net cash used in operating activities - continuing operations			(5,424,697	)			(3,088,019	)
Net cash used in operating activities - discontinued operations			(4,448,795	)			(743,512	)
Net cash used in operating activities			(9,873,492	)			(3,831,531	)
Cash flows from investing activities:
Purchase of digital assets			(59,586,023	)			-
Collateral paid on digial asset option contracts			(1,000,000	)			-
Net cash used in investing activities			(60,586,023	)			-
Cash flows from financing activities:
Proceeds from issuance of common stock upon registered direct public offerings			54,894,300				-
Proceeds from issuance of common stock upon private investment in public equity offerings			-				2,500,000
Proceeds from issuance of common stock upon at-the-market offerings			39,791,684				266,625
Proceeds from exercise of common stock warrants			186,579				-
Payment of deferred offering costs and other issuance costs			(3,627,422	)			(272,246	)
Proceeds from insurance premium financing liability			-				285,178
Repayment of insurance premium financing liability			-				(200,638	)
Repayments of note payable			-				(64,769	)
Net cash provided by financing activities			91,245,141				2,514,150
Net increase (decrease) in cash			20,785,626				(1,317,381	)
Cash, beginning of period - including discontinued operations			17,032,748				3,559,361
Cash, end of period - including discontinued operations			37,818,374				2,241,980
Cash, end of period - discontinued operations			576,806				-
Cash, end of period - continuing operations		$	37,241,568			$	2,241,980
Supplemental disclosure of non-cash activities:
Digital assets acquired but not yet settled in cash			77,083				-
Supplemental disclosure of non-cash financing activities:
Amortization of deferred offering costs from ATM offering			-				24,832
Reduction of premium related to insurance premium financing			-				101,102
Issuance of note payable for settlement of previously incurred professional fees			-				314,485
Issuance of options to settle liability			-				200,212

Non -GAAP Measures of Financial Performance

In addition to financial measures presented under generally accepted accounting principles in the United States of America (“GAAP”), the Company evaluates performance using non-GAAP financial measures including adjusted earnings before interest, taxes, depreciation, and amortization (“Adjusted EBITDA”) and Adjusted Operating Expenses, and Adjusted Operating Expenses Coverage Ratio.

Adjusted EBITDA

The Company defines Adjusted EBITDA as net income (loss), excluding income tax provision (benefit), stock-based compensation expense, unrealized gains or losses on digital asset holdings, and other non-recurring items. Management believes this financial measure provides a performance measurement that reflects our recurring core business operations. Adjusted EBITDA is provided in addition to, and should not be considered a substitute for, GAAP financial measures. Adjusted EBITDA has limitations as a financial measure, should be considered as supplemental in nature, and is not meant as a substitute for the related financial information prepared in accordance with GAAP.

Adjusted Operating Expenses

Adjusted Operating Expenses is defined as GAAP total operating expenses minus stock-based compensation expense, which the Company believes is not indicative of its ongoing expenses. The amount and timing of the excluded items are unpredictable, are not driven by core results of operations, and render comparisons with prior periods less meaningful.

Adjusted Operating Expenses Coverage Ratio

Adjusted Operating Expenses Coverage Ratio is calculated as Adjusted Operating Expenses divided by total revenues.

The following table reconciles Adjusted EBITDA to net loss, its most directly comparable GAAP measure for the periods indicated. It also reconciles Adjusted Operating Expenses to operating expenses, its most directly comparable GAAP measure for the periods indicated.

CANTON STRATEGIC HOLDINGS, INC.

RECONCILIATION OF GAAP TO NON-GAAP MEASURES

		For the Three Months Ended June 30,								For the Six Months Ended June 30,
		2026				2025				2026				2025
Net loss from continuing operations		$	(17,954,081	)		$	(1,432,587	)		$	(63,650,148	)		$	(3,471,760	)
Stock based compensation (1)			69,857				305,603				32,329,614				430,917
Unrealized loss from digital assets holdings			23,735,950				-				38,749,254				-
Provision (benefit) for income taxes			(6,672,175	)			-				(10,892,415	)			-
Adjusted EBITDA		$	(820,449	)		$	(1,126,984	)		$	(3,463,695	)		$	(3,040,843	)

(1) For the six months ended June 30, 2026, Stock based compensation included $32,228,509 of expense related to Strategic Advisor warrants and Advisor RSUs which were issued in connection with the November 2025 PIPE transaction and were recognized by the company in Q1 upon approval of shareholders at the special meeting of January 30, 2026.

		For the Three Months Ended June 30,								For the Six Months Ended June 30,
		2026				2025				2026				2025
Operating Expenses		$	2,698,013			$	1,428,594			$	37,919,194			$	3,472,642
Less: stock based compensation (1)			(69,857	)			(305,603	)			(32,329,614	)			(430,917	)
Adjusted Operating Expenses		$	2,628,156			$	1,122,991			$	5,589,580			$	3,041,725

(1) For the six months ended June 30, 2026, Stock based compensation included $32,228,509 of expense related to Strategic Advisor warrants and Advisor RSUs which were issued in connection with the November 2025 PIPE transaction and were recognized by the company in Q1 upon approval of shareholders at the special meeting of January 30, 2026.

		For the Three Months Ended June 30,								For the Six Months Ended June 30,
		2026				2025				2026				2025
Revenue			1,495,859				-				1,495,859				-
Adjusted Operating Expenses			2,628,156				1,122,991				5,589,580				3,041,725
Adjusted Operating Expenses coverage ratio			56.9	%			0.0	%			26.8	%			0.0	%

About Canton Strategic Holdings, Inc.

Canton Strategic Holdings, Inc. (NASDAQ: CNTN), is the first publicly traded company to leverage Canton Coin and support the Canton Network to advance institutional blockchain adoption and the digitization of financial markets. In addition to its operating business that drives value through activities on the Canton Network, the Company is a strategic investor in the Canton ecosystem. For more information, visit www.cantonstrategic.com.

Cautionary Note Regarding Forward-Looking Statements

This press release contains statements about future expectations, plans and prospects, as well as any other statements regarding matters that are not historical facts, which may constitute “forward-looking statements” within the meaning of the U.S. federal securities laws. Such statements include, but are not limited to, goals and expectations regarding the Company’s strategy and potential partnerships, future financial and operating performance, projections or statements of plans and objectives, and other statements accompanied by the words “intends,” “may,” “will,” “plans,” “expects,” “anticipates,” “projects,” “predicts,” “estimates,” “aims,” “believes,” “hopes,” “potential” or similar words, but the absence of these words does not mean that a statement is not forward-looking.

These forward-looking statements are based on current expectations, estimates, assumptions, and projections, and involve known and unknown risks, uncertainties, and other factors—many of which are beyond the Company’s control—that may cause actual results, performance, or achievements to differ materially from those expressed or implied by such statements. Important factors that may affect actual results include, among others, the Company’s ability to execute its growth strategy; its ability to raise and deploy capital effectively; ability to raise capital through on the Company’s at-the-market offering; developments in technology and the competitive landscape; the market performance of Canton Coin; government regulation of cryptocurrencies; the Company’s ability to achieve the deliverables required for future Super Validator weight unlocks; the developing nature of the Canton Network and the evolving legal and regulatory treatment of digital assets; the Company’s limited history of generating revenue and other risks; and uncertainties described under “Risk Factors” in the Company’s Annual Report on Form 10-K and in other filings with the SEC. These filings are available at www.sec.gov. The Company undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise, except as required by law.

Canton is a registered trademark of Digital Asset (Switzerland) GmbH. Digital Asset is not affiliated with, and has not sponsored or endorsed, the operations of Canton Strategic Holdings, Inc.

Contacts

Media:

Gasthalter & Co.

(212) 257-4170

canton@gasthalter.com

Investors:

ir@cantonstrategic.com

X: @CantonStrategic

LinkedIn: https://www.linkedin.com/company/cantonstrategicholdings/

Website: www.cantonstrategic.com

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